Buying Property

As a foreigner looking to buy a property in Australia, as a non-resident you must secure the approval of the Foreign Investment Review Board (Tel. 02-6263 3795). Their website also provides useful information on the process of buying a home.

You will also find that you are restricted in terms of the kind of property you can buy, with foreigners generally restricted to buying new rather than resale homes. FIRB will usually give you approval within 40 days, and you can exchange contracts on a property before this has been secured. However, ensure you include a clause in the contract stating that should you not receive FIRB approval, you may withdraw from the sale.

Australian Mortgages

As a foreigner, you are able to secure a mortgage for a property in Australia, and you can secure pre-approval before migrating to Australia. It is recommended that you do secure pre-approval as this will give you a clear idea about what you can afford to buy, and also gives you the confidence to put an offer in on a property, making it more likely to be accepted as well.

However, in the Aussie mortgage market, you tend to only get a loan of 80% of the property’s price, with rental income not taken into account when securing the loan. All mortgage applications are reliant on proof of income, so you will need to be employed when applying. It’s also a good idea to take your credit history and a letter from your bank manager to Australia with you, as this with smooth the way during the application process.

Currently it is not possible to secure a UK-based mortgage for a property in Australia, so other then securing an Australian mortgage, the only other choice is to remortgage or sell your UK home to raise the equity.

Purchasing an Australian Property

In terms of the actually process of buying a property, it is pretty standard. You can submit an offer for a property which will be considered by the seller - in most cases pretty swiftly. If your offer is accepted, you an exchange contracts straight away, although you are entitled to a 10-day cooling off period. However, buyers should note that with the exchange of contracts you are tied into the sale, and at this point a 10% deposit will be payable.

Nevertheless, most contracts are conditional, and will include clauses relating to issue such as FIRB approval, mortgage approval and the findings of a survey. If any of these fall through or the survey turns up problems, then the sale can be aborted.

After the exchange of contracts, your lawyer will now run background checks and searches, to ensure the title deed is clean before completion – this will essentially ensure that there are no debts attached to the title, and that the seller is indeed the owner. If debts are attached to the property and you buy it, they will automatically be transferred to you.

If the title proves clean, the survey comes back clear and your finance has been successfully secured, you can move to completion of the sale, which generally happens six weeks after the initial exchange of contracts.

Costs and taxes

As a rule of thumb, you should expect to be faced with additional costs of 5% of the price of the property when buying. This 5% includes the following:

• Land Transfer Registration fee: this varies from state to state
• Legal fees: these range between AUD$500 and $1,200 (£200 and £479)
• Mortgage application
• Local taxes: again, these vary from state to state
• Property survey: this costs around $500 (£200)
• Buildings insurance.
• Some states will also require you to have a termite and pest inspection carried out

The tax system has been regarded as extremely complicated in Australia, but seeking professional advice should iron out any problems. You will be expected to pay income tax in Australia if you spend more than six months out of 12 in Australia. Capital Gains Tax is Capital gains tax is payable on any property you own aside from your principal residence. The amount payable depends on your financial circumstances. Find out more about taxes here (link to tax tab under lifestyle).

Selling your property

If, in the future, you want to sell your home in Australia, and move to another Aussie property, you will need to apply to FIRB again

Australian Property Statistics (August 2008)

Area	Median House Price	Change
Sydney	$560,941	-1.51%
Melbourne	$446,433	-1.13%
Brisbane	$449,443	-2.70%
Adelaide	$408,670	-2.14%
Perth	$484,223	-2.75%
Canberra	$477,806	-2.34%

If you are looking for a property to buy try:

• Domain – the key to your property dreams
• realestate.com.au